Olympus admits enormous losses cover-up

Olympus has owned up to the longest ever running corporate snafu in Japanese corporate history – having fiddled the books for decades.

Executives instead opted to use a bunch of mysterious acquisitions to tidy up the grim reading. The camer-maker, which is almost 100 years old, makes it the longest running loss hiding activity in Japanese corporate history according to the Wall Street Journal.

Now Olympus is under the watchful eye of authorities from both the Tokyo Stock Exchange and the US FBI. The company had been embroiled in a bizarre scandal of its own doing by British ex-CEO Michael Woodford, who detected some odd movements at Olympus. That included buying a string of companies registered in the notorious Cayman Islands, all of which ended up dissolved or shut down.

Olympus wrote off the value, according to an investigation from the Wall Street Journal.

Woodford, in his efforts to fix the mess, was rewarded with a sacking. Chairman Shuichi Takayama blamed him for Olympus’ mess, arguing that if he hadn’t been playing Sherlock Holmes the company might have got away with it for a bit longer. “If this secret information hadn’t been leaked there would have been no change in our corporate value,” Takayama said at the time.

Woodford, who is reportedly shocked by the confession, still thinks Olympus needs a full investigation. Takayama insists Woodford has no place at Olympus anymore. After all, he was sacked for his management style. Er…

Share prices have been struggling. The cover up knocked 29 percent off immediately Monday to $9.40, the lowest they’ve been since 1995. The Wall Street Journal says stock has dropped 70 percent since the scandal cropped up in October.

Now, Takayama has shifted the blame onto three top Olympus execs. Ex chairman Tsuyoshi Kikukawa, vice president Hisashi Mori and corporate auditor Hideo Yamada. Takayama says he had no idea until Mori let slip to him on Monday.

There’s a chance Japan’s Securities and Exchange Surveillance Commission will further get involved. “We will carry out the necessary inspection if there is suspicion of false statement in financial reports,” a spokesperson told the WSJ.